A $199 iPad: 10 Reasons Apple Should Discount its Tablet

NEWS ANALYSIS: Apple is facing off with a growing number of tablets that come with a $199 price tag. Maybe it’s time the iPad maker follows suit.

Apple is the most dominant tablet maker in the industry. The company sold more than 15 million iPads during the fourth quarter, and secured an unbeatable share of the tablet space. All other companies are left to pick up scraps that, in the coming years, Apple might just try and grab. To say that the company€™s iPad is a huge success, at this point, would be an understatement.

However, Apple is feeling some pressure from Amazon€™s Kindle Fire. The 7-inch, Android-based tablet can€™t keep up with the iPad on power or features, but its $199 price tag is attractive to consumers. Realizing that, Barnes & Noble recently announced the launch of the 8GB Nook Tablet for the same $199 price tag. Chances are, in the coming months, more companies will follow suit and try to severely undercut Apple on price.

But perhaps the time has come for Apple to throw a curveball. Rather than allow Amazon and Barnes & Noble to feed on the bargain end of the tablet market, Apple should deliver its own $199 iPad. It won€™t be able to match the iPad 3, of course, but it could put its chief competitors on their heels. And in the highly lucrative tablet space, doing so is a very, very good move.

1. Everyone else is doing it

In the tablet space, it seems just about every company is trying to bring prices down to match the Kindle Fire. As noted, Barnes & Noble has done it, and other companies are expected to follow suit this year. If $199 is the new sweet spot for tablet pricing, Apple should want to be there.

2. It€™s the unexpected

Apple likes to do things that the market doesn€™t expect. Why shouldn€™t the company do it this time around with a $199 iPad? For years, Apple has been the provider of an expensive tablet, despite the market seemingly wanting a cheaper device. It€™s about time Apple does something in the tablet space that no one--including Apple€™s own, loyal fans--expect.

3. It has the iPad 2 ready to go

In the past, Apple has delivered new iPhones, but kept earlier models on store shelves at reduced prices. It€™s doing it right now with the iPhone 3GS and iPhone 4. The company should consider doing the same with the iPad 2. It€™s not clear if Apple would be able to get down to $199 on the iPad 2, but it could get close.

4. It won€™t hurt iPad 3 sales

Apple€™s iPad 3 is expected to be unveiled in early March. And when the device is announced, it could come with a host of major improvements, including a Retina Display and a quad-core processor. Although a cheaper iPad might, at first glance, seem to hurt the iPad 3€™s sales, it€™s highly unlikely that€™ll happen. A $199 iPad and the iPad 3 are targeting two very different customers.